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PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE IN NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND
ITS FINANCIAL SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
V. CONSOLIDATED FOREIGN CURRENCY EXCHANGE RISK
Foreign exchange risk that the Parent Bank is exposed to, estimation of effects of exposures, and the limits set by the Board of Directors of the
Parent Bank for the positions monitored on a daily basis
The Standard Method which is also used in the legal reporting is used in measuring the currency risk of The Parent Bank.
The Parent Bank’s and all consolidated financial subsidiaries’ foreign currency assets and liabilities and the forward foreign-currency transactions are
taken into consideration in calculating the capital obligation for the consolidated currency risk. The net long and short positions are calculated in Turkish
Lira equivalent of the each currency. The position with the biggest absolute value is determined as the base amount for the capital obligation. The
capital obligation is calculated at that amount.
The magnitude of hedging foreign currency debt instruments and net investment in foreign operations by using derivatives
As at 31 December 2015 and 31 December 2014, the Group does not have derivative financial instruments held for risk management purpose.
Foreign exchange risk management policy
Risk policy of the Parent Bank is based on the transactions within the limits and keeping the currency position well-balanced. In the light of the national
legislations and international applications, the Parent Bank has established a foreign currency risk management policy that enables the Group to take
position between lower and upper limits determined in respect of the current equity profile. Speculative position is not held by the Parent Bank. The
effective exchange rates at the date of balance sheet and for the last five working days of the period announced by the Parent Bank in TL are as
follows:
US Dollar
Euro
The Bank’s foreign currency purchase rate at the balance sheet date
2.9100
3.1661
Foreign currency purchase rates for the days before balance sheet date;
Day 1
2.8600
3.1263
Day 2
2.8500
3.1259
Day 3
2.8600
3.1368
Day 4
2.8500
3.1259
Day 5
2.8600
3.1260
Last 30-days arithmetical average rate
2.8527
3.0912
